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Town awaits building-fee study results

A user and building-permit fee study the town paid approximately $18,000 for more than two years ago is still in a state of flux.

Finance Director Tom Kelley said there are still lingering questions about a study being performed by Anaheim, Calif.,-based Willdan Financial Services.

The town, attempting to help make the Planning, Zoning and Building department break even or create a profit, approved the study in May 2008. The goal was to make sure the building department is charging sufficient monetary fees.

But in an attempt to boost department revenues, Willdan Financial Services has suggested in several revisions of its report that the building department needs to pull in as much as $5 million per year.

But Kelley said a building department that has expenses of approximately $700,000 to $800,000 per year would never need to and couldn’t pull in that much revenue.

When Kelley raised that issue, Willdan Financial Services suggested that the building department should pull in at least $2.5 million per year.

But that number is also not realistic, Kelley said.

“Revenue estimates are too high and the company is revising its report again,” Kelley said. “We can’t bring in three or four times as much as our expenses.”

Kelley believes the building department could charge more for its fees and services and also require contractors to put down a non-refundable deposit.

“Right now, if the building department begins working on a project and the contractor walks away from it, we are losing that staff time,” Kelley said.

Kelley also hopes the study will eventually show that the building department can charge more for renovation work, which makes up the majority of the building department’s work, because the island is essentially built out.

“I think a suggestion that the building department bring in approximately $1 million worth of revenue a year is more reasonable,” Kelley said.

Town Manager Bruce St. Denis is not concerned about the length of time it’s taking for the study to be completed, in part, because the building department is close to breaking even.

“At one point, this study was more critical than it is now,” said St. Denis, who noted that the town will not need to fund $500,000 in shortfalls to keep the department operating like in previous years. “We have made changes, laid off three employees and are within $20,000 of breaking even this year.”

But St. Denis says the study is still necessary, noting the department “still has shortcomings.”

Currently, the department charges a contractor more for new construction jobs, even though the cost of performing a renovation is higher.

“And we need to make fees fairer by basing them on a workload instead of basing what we charge off of the value of the materials used for a job,” St. Denis said.

Currently, a contractor who uses more expensive materials is charged more for building fees.

“We are trying to resolve these issues by changing the methodology,” said St. Denis, who now believes the study won’t ready for the commission’s review until September.

In the meantime, Willdan Financial Services is still owed approximately $9,500 for the original study, which had an original price tag of $27,355, according to town Purchasing Manager Gerry Wilson.

St. Denis said the consultant has not asked for additional funds to perform the revisions, in part, because town staff was unhappy with former finished products; the original crew working on the study was replaced at the town’s request.

But Kelley says that the consultant has informed the town that it has begun to track additional time in case it charges for extra time spent on a project that’s now heading into its third year.

Wilson, however, said the town has not agreed to pay for any additional work being performed at this time.
Kelley also believes that the study is not critical at this point because the department is not in dire straights.

“But this study does have to be put to bed at some point,” Kelley said.